Correlation Between Aurora Solar and BCE
Can any of the company-specific risk be diversified away by investing in both Aurora Solar and BCE at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Aurora Solar and BCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora Solar Technologies and BCE Inc, you can compare the effects of market volatilities on Aurora Solar and BCE and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Aurora Solar with a short position of BCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora Solar and BCE.
Diversification Opportunities for Aurora Solar and BCE
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aurora and BCE is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Aurora Solar Technologies and BCE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCE Inc and Aurora Solar is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Aurora Solar Technologies are associated (or correlated) with BCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCE Inc has no effect on the direction of Aurora Solar i.e., Aurora Solar and BCE go up and down completely randomly.
Pair Corralation between Aurora Solar and BCE
Assuming the 90 days horizon Aurora Solar Technologies is expected to under-perform the BCE. In addition to that, Aurora Solar is 28.24 times more volatile than BCE Inc. It trades about -0.02 of its total potential returns per unit of risk. BCE Inc is currently generating about 0.12 per unit of volatility. If you would invest 1,039 in BCE Inc on September 3, 2024 and sell it today you would earn a total of 61.00 from holding BCE Inc or generate 5.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurora Solar Technologies vs. BCE Inc
Performance |
| Timeline |
| Aurora Solar Technologies |
| BCE Inc |
Aurora Solar and BCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora Solar and BCE
The main advantage of trading using opposite Aurora Solar and BCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora Solar position performs unexpectedly, BCE can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BCE will offset losses from the drop in BCE's long position.| Aurora Solar vs. Eline Entertainment Group | Aurora Solar vs. Green Leaf Innovations | Aurora Solar vs. Plandai Biotech | Aurora Solar vs. All American Gld |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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